Goldman Says Oil's Correction A Buying Opportunity

Goldman Sachs said the recent pullback in crude oil futures represents a buying opportunity for investors. The venerable Wall Street bank made that assertion in a note to clients that was published today. Goldman said it expects NYMEX-traded crude to trade up to $115 a barrel in six months.

The bank's 12-month price target for West Texas Intermediate is $126.50 a barrel. World economic growth will continue to drive demand growth ''well in excess of'' production growth from producers that aren't members of the Organization of Petroleum Exporting Countries, Goldman said in the note, the Wall Street Journal reported.

Goldman (GS) said it is only a matter of time before inventories and excess OPEC capacity are exhausted and then higher prices will be required to restrict oil demand. The bank also said that while it expects the spread between Brent crude and West Texas Intermediate to narrow, it would not make a trading recommendation on that scenario because the risks are too high.

Goldman said the price gap between the two futures contracts has expanded because of weaker U.S. Gulf Coast light-sweet crude oil prices, not an inventory glut at the Cushing storage facility.